Correlation Between GM and By Health
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By analyzing existing cross correlation between General Motors and By health, you can compare the effects of market volatilities on GM and By Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GM with a short position of By Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and By Health.
Diversification Opportunities for GM and By Health
Very weak diversification
The 3 months correlation between GM and 300146 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and By health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on By health and GM is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on General Motors are associated (or correlated) with By Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of By health has no effect on the direction of GM i.e., GM and By Health go up and down completely randomly.
Pair Corralation between GM and By Health
Allowing for the 90-day total investment horizon GM is expected to generate 1.13 times less return on investment than By Health. But when comparing it to its historical volatility, General Motors is 1.42 times less risky than By Health. It trades about 0.08 of its potential returns per unit of risk. By health is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,100 in By health on August 28, 2024 and sell it today you would earn a total of 116.00 from holding By health or generate 10.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.63% |
| Values | Daily Returns |
General Motors vs. By health
Performance |
| Timeline |
| General Motors |
| By health |
GM and By Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and By Health
The main advantage of trading using opposite GM and By Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, By Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in By Health will offset losses from the drop in By Health's long position.The idea behind General Motors and By health pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| By Health vs. Winner Medical Co | By Health vs. Cowealth Medical China | By Health vs. Ningbo MedicalSystem Biotechnology | By Health vs. Tsingtao Brewery Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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